Visa will create a competitor to SWIFT

Visa payment system in collaboration with British technology company BTL Group is working on integration of the blockchain technology in inter-bank transfers.

MoneyBlogNewz via flickr

The company invites creditors to test remittances using the blockchain. The project is supposed to reduce costs, accelerate time of transfers and lower risks for partners.

BTL Group was founded last year by Guy and Hugh Halford-Thompson. The company develops blockchain technologies in its own laboratories, and in specialized incubators and accelerators in Vancouver, Canada.

BTL is known for its smart money transfer platform Interbit, offers fast and inexpensive transactions from Canada and the UK. Visa will now use the same platform, said Hendrik Kleinsmiede, co-founder of innovative hub Visa Europe Collab.

Testing will last for 100 days. Visa claims that the potential of the platform is almost equal to SWIFT system. In case of success, the company may create a competitor to SWIFT, which has become a subject of regular cyber-attacks. On Wednesday, SWIFT warned its members that hackers continue to look for vulnerabilities in IT-systems of banks. "Target objects vary in size and geography, hackers use different methods of communication and different interfaces of systems" - said SWIFT in a letter. The attacked banks were not specified.

Last week, four major banks - UBS, Santander, Deutsche Bank and BNY Mellon – announced partnership with broker ICAP and startup Clearmatics. Together, they are going to create a digital currency based on the blockchain technology, which eventually should become a standard in the industry of banking payments. "Now, cutting costs is the most important thing in the banking world, since everyone has problems associated by low incomes. That is why they rely on the blockchain", - said Head of Financial Services at Accenture Richard Lumb.

The blockchain technology has been invented long time ago, and yet, the banks still don’t dare to fully implement this. Why?

Perhaps, financial institutions are worried about privacy of transactions’ data. Such a conclusion was made by experts of Greenwich Associates in their new report.

Distrust in the new technology is aggravated by a recent break in Bitcoin exchange Bitfinex, and attempted attacks on the DAO.

Greenwich Associates surveyed 134 participants of the banking market. 56% of them believe that the biggest problem with blockchain is confidentiality of the transaction data. 63% of banks and brokers are concerned with this problem.

Privacy is one thing that will be hard to obtain because of blockchain’s consolidated audit trail that ensures maximum transparency of operations. The irony is that creators of the technology are proud of this feature the most. Developers such as Digital Asset Holdings, Chain and R3 intend to address this issue by introducing a special functionality to maintain confidentiality of data.